Research On Financial Statement Audit Integrating With Internal Control Audit

In the early 21 century, a series of financial scandals broke out in United States, such as Enron and WorldCom company events. Then internal control and internal control audit aroused wide concern in terms of theory and practice, that was because they can make up for the deficiency of traditional financial statement audit to keep objectivity and reliability. As a result, the US promulgated the Sarbanes-Oxley Act (referred to as the SOX Act). Since then, the internal control audit has become a mandatory provision. The US subsequently promulgated the Auditing Standard No.2 and Auditing Standard No.5, which provide guidance for the certified public accountant to conduct the internal control audit in practice. At the same time, the integrated audit had been put forward and widely used by the public corporations and the non-public corporations in US, and it had been widely recognized in the international world. In order to adapt to the emerging market economy and conform to the changes of the international capital market supervision environment, China also formulated relevant provisions on internal control, including the provisions on internal control audit. But the internal control audit in our country is still in the initial stage, which is limited to use in the listed companies or large and medium-sized state-owned enterprises. And its implementation mode is not limited, so CPA can choose to perform the two audits separately, or integrate the financial statement audit with the internal control audit. But from the view of domestic integration audit system and the actual operation effect, there are no specific guidelines of integrated audit, so the integration effect is not good in actual. Basing on the reality, this dissertation mainly puts forward the process of the integrated audit, basing on the study of relevant theory of integrated audit, and applies the process in XHYS company to analyze the specific application of integrated audit, and then finds problems and puts forward relevant suggestions to provide references for the accounting firms to carry out more auditing practice in the future.This dissertation firstly introduces the background and concept of the integrated audit, and introduces three related basic theories of integrated audit, including the Cost-benefit balance principle, the Synergy effect theory and the Audit demand theory, which provide theoretical support for the implementation of the integrated audit. Secondly, a comparative analysis of financial statement audit and internal control audit expounds the necessity and practicability of the integrated audit. Then through the analysis of the integration point, the dissertation puts forward a complete set of integrated audit business process. Thirdly, in combination with the case of XHYS company, which conducted by AHHP accounting firm, this dissertation expounds the specific application process and content of the integrated audit process. In this case, it specifically covers the planning stage, implementation stage, evaluation of control defects and the audit report stage, in order to confirm the operability of the integrated audit. Finally, the author finds several problems in the process, and puts forward some corresponding recommendations for China’s integrated audit.The application of internal control audit in our country is not long, in particular, there are still disputes and inadaptability over the application of integrated audit, and it needs the mutual cooperation of our government, the accounting firm, the enterprise and the audit staff. So this dissertation discusses the integration of financial statements audit and internal control audit, which is not only a realistic choice, but also a supplement to the theory of China’s audit, especially the integrated audit theory. And it also has important significance to guide the audit practice for accounting firms.